• Do something to make LivingSocial the anchor company. Blackboard and AOL are past their "sell by" dates as inspiration.
• Pick ONE university (AU, GW or Georgetown) to turn into the anchor university. I'd bet on AU.
• Pick a theme. What narrow area can you do at least 10x better than Silicon Valley? (journalism, e-governance come to mind)
• Focus on helping lifestyle businesses find each other and collaborate, not on growing direct employment at startups (i.e. get ahead of the curve on the "studio startup" model).

I am now a free-agent in the DC area after remote-working from here for several years for an out-of-area company. But my first consulting client still came from the Bay Area. I have a couple of local area leads, but most of my potential leads seem to be popping up in the Bay Area.

In purely empirical terms, there is significant pull for me to simply move there (including literal exhortation from friends/well-wishers). To prevent such talent migration due to demand patterns, there are probably some innovative steps that can be taken, but I can't think of any off the top of my head. Just flagging it as a concern.